Garner v. BANKPLUS
470 B.R. 402
S.D. Miss.2012Background
- Plaintiffs filed state-law claims in Hinds County Circuit Court July 26, 2011 against BankPlus for breach of contract, misrepresentation, estoppel, and injunctive relief related to a loan restructuring; seeks estoppel, injunction, declaratory relief, and damages.
- RTC Properties filed Chapter 11 in August 2011; BankPlus removed the case to federal court as related to bankruptcy proceedings.
- Additional bankruptcy petitions followed for Pavilion Properties and three individuals, creating related bankruptcy proceedings in the Southern District of Mississippi.
- Plaintiffs moved for abstention and remand under 28 U.S.C. § 1334(c)(2); BankPlus opposed. Court considered discretionary abstention and equitable remand alternatives.
- Court found that the actions are non-core, mandatory abstention applies, and remand to state court is appropriate.
- Court noted even if core, discretionary abstention/remand would be available; ultimately granted abstention and remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mandatory abstention applies under §1334(c)(2). | Plaintiffs contend conditions for mandatory abstention are met. | BankPlus concurs on timeliness and state-law nature but disputes core status and timeliness. | Yes; mandatory abstention applies and remand granted. |
| Whether the proceedings are core or non-core under §157(b)(2). | Actions are state-law, non-core; could proceed in state court. | Claims are related to bankruptcy and affect estate administration. | Non-core; proceedings abstain and remand approved. |
Key Cases Cited
- Matter of Wood, 825 F.2d 90 (5th Cir.1987) (core vs non-core framework; list of core categories)
- Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50 (U.S.1982) (rejects broad reading of core/related; distinction of restructuring vs. adjudication of private rights)
- Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (U.S.1989) (non-core actions involving estate may proceed in state court)
- Feld v. Zale Corp., 62 F.3d 746 (5th Cir.1995) (related-to bankruptcy jurisdiction; related concepts)
- Anderson v. Nissan Motor Acceptance Corp., 326 F.Supp.2d 760 (S.D. Miss.2003) (timeliness and abstention considerations in state-law claims)
- Stern v. Marshall, 131 S.Ct. 2594 (U.S.2011) (limits and interpretation of core proceedings under §157(b)(2))
- Mirant Corp. v. The Southern Co., 337 B.R. 107 (N.D. Tex.2006) (cautions against broad application of catchall provisions)
- In re Doctors Hosp., 1997, L.P., 351 B.R. 813 (Bkrtcy. S.D.Tex.2006) (support for narrow reading of catchall)